CLA1503 F1 CONCESSION PORTFOLIO.

CLA1503 COMMERCIAL LAW 1C F1 CONCESSION PORTFOLIO AUGUST 2019 SECTION A QUESTION 1 It is possible to entrench the continued existence of the substantive offer by means of an option. The offer cannot be withdrawn while the option exists. This option is a separate contract. The option gives the option-holder the right to choose whether or not to conclude the main contract (which will arise from the substantive offer) with the option-giver. The option-holder’s right is usually limited to a specified time. If Brian accepts offer (2) but has not yet accepted the entrenched substantive offer (1), an option exists in which Andrew is the optiongiver and Brian the option-holder. At this point, the horse has not yet been sold. Now Brian has two weeks in which to decide whether he wishes to accept Andrew’s offer to sell the horse. uring these two weeks, Andrew may not withdraw this (entrenched) substantive offer; neither may Andrew offer, in the meantime, to sell the horse to a third party, Charles. The option binds Andrew to keep the entrenched offer open in favour of Brian for two weeks. Before the end of those two weeks, Brian may decide to reject Andrew’s substantive offer. If Brian rejects Andrew’s substantive offer within, for example, four days, the option comes to an end and the substantive offer also comes to an end. Since the option ended before the end of the specififi ed two weeks, Andrew now has the right to offer the horse to Charles or to accept Charles’s offer to buy it. However, if Brian accepts Andrew’s substantive offer within the specififi ed two weeks of the existence of the option and he lets Andrew know that he wishes to buy the horse, the option comes to an end, and the contract of sale is concluded